BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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                              UNFINISHED BUSINESS


          Bill No:  SB 210
          Author:   Kehoe (D)
          Amended:  8/20/07
          Vote:     21

           
           SENATE TRANSPORTATION & HOUSING COMMITTEE  :  7-4, 3/27/07
          AYES:  Lowenthal, Cedillo, Corbett, Kehoe, Oropeza,  
            Simitian, Torlakson
          NOES:  McClintock, Ashburn, Dutton, Harman

           SENATE ENV. QUALITY COMMITTEE  :  4-2, 4/23/07
          AYES:  Simitian, Kuehl, Lowenthal, Steinberg
          NOES:  Runner, Aanestad
          NO VOTE RECORDED:  Florez

           SENATE APPROPRIATIONS COMMITTEE  :  10-6, 5/31/07
          AYES:  Torlakson, Cedillo, Corbett, Florez, Kuehl, Oropeza,  
            Ridley-Thomas, Simitian, Steinberg, Yee
          NOES:  Cox, Aanestad, Ashburn, Dutton, Runner, Wyland
          NO VOTE RECORDED:  Battin


          SUBJECT  :    Greenhouse gas emissions: fuel standard

           SOURCE  :     Author


           DIGEST  :    This bill requires the California Air Resources  
          Board to adopt, implement, and enforce a low-carbon fuel  
          standard by regulation to reduce the carbon intensity of  
          transportation fuels in California.

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           Assembly Amendments  recast the bill in its current form.

           ANALYSIS  :    

           Existing Law
           
          1.Under the California Global Warming Solutions Act of 2006  
            (CGWSA), requires the State Air Resources Board (ARB) to  
            determine the 1990 statewide greenhouse gas (GHG)  
            emissions level and approve a statewide GHG emissions  
            limit that is the equivalent to that level, to be  
            achieved by 2020.  The ARB must adopt rules and  
            regulations to achieve GHG emission reductions from  
            sources or categories of sources, subject to certain  
            requirements. 

          2.Under the Alternative Fuels Law, requires the California  
            Energy Resources Conservation and Development Commission  
            (CEC), in consultation with certain entities, to develop  
            and adopt a state plan by June 30, 2007, to increase the  
            use of alternative transportation fuels and set goals for  
            2012, 2017, and 2022 to increase alternative fuel use in  
            the state that meet certain requirements. 

          3.Requires the Office of Planning and Research to be the  
            coordinating entity in state government for environmental  
            justice programs and defines "environmental justice" to  
            be "the fair treatment of people of all races, cultures,  
            and incomes with respect to the development, adoption,  
            implementation, and enforcement of environmental laws,  
            regulations, and policies."  

          This bill enacts the Greenhouse Gas Emissions Fuel  
            Standards Law that:

          1.Requires the Air Resource Board (ARB) to adopt,  
            implement, and enforce a LCFS by January 1, 2010 that  
            achieves the maximum technologically feasible and  
            cost-effective reductions in the carbon intensity of  
            transportation fuels, at a minimum, the carbon intensity  
            of transportation fuels shall be reduced by 10 percent by  
            January 1, 2020, if technologically feasible and cost  
            effective.


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          2.Subjects all refiners, blenders, producers, and imports  
            of transportation fuels to the LCFS, to the extent  
            permitted by law.

          3.Requires ARB to:

             A.    Maintain or improve upon emissions reductions  
               and air quality benefits achieved by the California  
               Phase 2 Reformulated Gasoline Program as of January  
               1, 1999, including emissions reductions for all  
               pollutants and precursors identified in the State  
               Implementation Plan for ozone, and emissions of  
               potency weighted toxics compounds and particulate  
               matter, or maintain or improve upon emissions  
               reductions and air quality benefits achieved by the  
               stare's diesel fuel regulations.

             B.   Ensure that activities undertaken pursuant to  
               this article complement, and do not interfere with,  
               efforts to achieve and maintain federal and state  
               ambient air quality standards and to reduce toxic  
               air contaminant emissions.

             C.   Ensure that the LCFS is consistent with  
               environmental justice, as defined in existing law.

             D.   Account for greenhouse gas emissions on a full  
               fuel-cycle basis to the extent that reliable  
               information exists, as determined by ARB.  ARB shall  
               periodically update the methodology for quatifying  
               greenhouse gas emissions on a full fuel-cycle basis.

             E.   Avoid or mitigate to the maximum extent feasible  
               significant environmental impacts, f any, associated  
               with implementation of the LCFS, including avoiding  
               or mitigating significant environmental impact from  
               sourcing and producing fuels used to comply with the  
               LCFS.

             F.   Defines "full fuel cycle" to mean the production,  
               extraction, cultivation, transportation, and storage  
               of feedstock, the production, manufacture,  
               distribution, marketing, transportation, and storage  
               of fuel, and vehicle operation including refueling,  

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               combustion, conversion, and evaporation.

          4.Requires ARB to update the regulations adopted pursuant  
            to this bill as necessary to avoid or mitigate, to the  
            maximum extent feasible, significant environmental and  
            other impacts identified in a report required by this  
            bill.

          5.Requires ARB to coordinate the preparation of a  
            multimedia evaluation pursuant to existing law for fuels  
            a used to comply with the LCFS.

          6.Requires ARB, by January 1, 2010, as part of the LCFS, to  
            develop reporting requirements that include those factors  
            necessary to quantify full fuel-cycle greenhouse gas  
            emissions and environmental impacts of fuels subject to  
            the LCFS.

          7.Requires, by June 30, 2013, the State Energy Resources  
            Conservation and Development Commission (CEC) to issue a  
            report on the significant impacts of the LCFS and  
            recommendations to mitigate those impacts, as specified.   
            The report shall be updated and reissued every three  
            years to take into account new information, scientific  
            findings, or quantification methods.

          8.Requires CEC to update and reissue, by June 30, 2010, a  
            report required by existing law AB 1007, Chapter 371,  
            Statutes of 2005, on how the state can increase the use  
            of alternative transportation fuels.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

          According to the Assembly Appropriations Committee analysis  
          moderate costs, in the range of $1.5 million spread over  
          three years starting in 2007-08, to ARB to develop and  
          enforce the LCFS, and to develop related environmental  
          reporting requirements.  To the extent ARB is already  
          conducting some of these activities under an executive  
          order issued by the Governor, these costs will reduces.   
          Moderate one-time costs, $375,000 in 2008-09 and 2009-10,  
          to the CEC to update its alternative fuels reports.   
          Moderate General Fund costs, in the range of $180,000 in  

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          2012-13 an triennially thereafter, to the CEC to assess  
          LCFS environmental impacts and to issue recommendations on  
          how to minimize these impacts.

           SUPPORT  :   (Verified  9/10/07)

          American Federation of State, County and Municipal  
          Employees
          American Lung Association of California
          California Association of Professional Scientists
          Coalition for Clean Air
          Energy Independence Now
          Environment California
          Environmental Defense
          Friends of the Earth/Bluewater Network
          Natural Resources Defense Council
          Planning and Conservation League
          Sierra Club California
          Silicon Valley Manufacturers
          Union of Concerned Scientists

           OPPOSITION  :    (Verified  9/10/07)

          California Chamber of Commerce
          California for Environmental Economic Balance
          California Independent Marketers Association
          California Trucking Association
          Southwest California Council
          Western States Petroleum Association

           ARGUMENTS IN SUPPORT  :    According to the author's office,  
          AB 32 (Nunez) Chapter 488, Statutes of 2006, "aimed at  
          reducing California's [GHG] emissions, provides direction  
          and broad authority to the [ARB] to achieve the maximum in  
          technologically feasible and cost-effective reductions in  
          [GHG] emissions."  The author's office notes that Governor  
          Schwarzenegger issued Executive Order (EO) S-01-07 that  
          calls for "a statewide goal to be established to reduce the  
          carbon intensity of California's transportation fuels by at  
          least 10 percent by 2020" and that this bill codifies this  
          provision of the EO "making his directive binding under the  
          law and clarifying that environmental and public health  
          safeguards will be consistent with AB 32."


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           ARGUMENTS IN OPPOSITION  :    The California Chamber of  
          Commerce opposes this bill which interferes with the  
          development of a competitive alternative fuels market and  
          threatens job creation in California by creating a costly  
          Low Carbon Fuel Standard that conflicts with the existing  
          standard created by Governor's Executive Order 5-7-04.  In  
          order to meet increasing consumer demand, it is necessary  
          that the fuels market is full of options and represents a  
          mix of alternatives.  However, unlike the Governor's  
          Executive Order, this bill would limit the fuel technology  
          providers could use to meet the ten percent reductions  
          standards.

          Last year Governor Schwarzenegger signed into law the  
          world's most sweeping legislation to control global  
          greenhouse gas emissions, Assembly Bill 32.  This  
          groundbreaking legislation establishes a process for  
          reducing greenhouse gas emissions and requires to  
          development of a comprehensive plan in a balanced and  
          expeditious manner, including encouraging the use of  
          alternative fuels.  The California Air Resources Board has  
          been tasked with the duty to explore and develop  
          regulations to achieve the reduction required under AB 32.   
          This process is currently underway.  SB 210 (Kehoe)  
          however, ignores this planning and prejudges the outcome of  
          AB 32 and the Governor's Low Carbon Fuel Standard as  
          created in his Executive Order earlier this year.  
           

          JJA:do  9/10/07   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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